The Strategy Of The Inflation Targeting And The Efficiency Of The Monetary Policy

It is widely recognized that the strategy of the inflation targeting is the basic component of the monetary policy in many countries. The reason behind the widespread of this approach refers to the capability of the target process to enhance the efficiency of the monetary policy both in terms of objectives and execution. However, it should be noticed that the targeting framework is not an absolute panacea to the obstacles facing the policy makers, and this issue comes from the nature of the monetary policy per se. The latter could be considered more discretionally than a pure framework to apply because of the differences of the financial circumstances of the countries and their economic and social welfare. This paper attempts to highlight the pros and the cons of the inflation targeting strategy and its impact on the monetary efficiency paradigm.